Financial review of 2019

As we step into a new year, its important to look back and reflect on our financial  accomplishments and failures. This will help us to identify strength areas as well as improvement areas. Below are the highlights of our financial review of 2019.

Savings rate

Our average monthly savings rate in 2019 was

80%, with a minimum and maximum variation of 73.03% and 84.87% respectively. We are quite happy to achieve this rate and look forward to increase it by 1-2% in 2020. 

Below chart depicts monthly savings rate in 2020. 

Category-wise expenses

• At 52%, expenses on rent, maintenance and utility bills(electricity, mobile, broadband) were the biggest contributors. However, we are happy with our current accommodation, use electricity judiciously and avail cheap mobile plans.
• Travel expenses(12%) included bus/train/flight tickets, food & lodging. In 2019, we didn’t go to any international destination which kept the expenses on the lower side. In addition, travel expenses also included trips to our hometown(s) during festivals.
• Our primary source of groceries were e-commerce sites like Milkbasket and Grofers. For our family of two with rare visitors, these expenses were at 7%.
• Entertainment included expenses incurred on dining-out or ordering food, partying, streaming services, movies tickets, and buying liquor. Expenses in this category were at 6% and we really enjoyed all of them.
• Home improvement at 5% included expenses on fixes, repairs, and improving aesthetics(plants/planters/decorative items etc).
• Gifts(5%) were primarily to parents during festivals or close relative on weddings.
• We cut-down our shopping expenses(clothes and accessories) to 2%. This is one of the main areas where overspend can be avoided by everyone.
• One time shifting during June-July costed us 3% of total expenses. We hope that there is no need of it in 2020.
• Living closer to our offices helped to reduce commute expenses to 2%. These included fuel and servicing for our scooter, Uber/Ola/auto-rickshaw charges and metro card recharges.
• Miscellaneous expenses included blog-hosting charges and bank/government dept. fees. These were at 2% and there is a scope of keeping them under 1%.
• Thanks to a healthy lifestyle and a medical cover from employer, our medical expenses were at 1%.
• Expenses on personal grooming(hair-cuts, waxing, make-up etc.) for us were at 1%. Although these are important, there is no need to overspend.

Net assets growth

We added Rs. 37,93,038 to our retirement corpus in 2019. This is an average growth of Rs. 3,16,086 per month. While savings from our active income source(salary) was the primary contributor to net worth, around 3.5L was added by passive income sources i.e. dividends from stocks and interest from PPF, EPF, Fixed Deposits.

Financial goals for 2020

Based upon the financial review, we’ve setup few goals for this year:-

• Increase savings rate by 2-3% from last year. This would be possible by salary increments and cutting down on few expense categories.
• Increase net assets by Rs 41L, through savings and passive income.
• Maintain a healthy lifestyle(exercise, healthy food habits). After all, health is wealth.
• Take an international vacation.
• Avoid expenses related to lifestyle inflation. A good article about lifestyle inflation – https://www.daveramsey.com/blog/lifestyle-inflation
• Review and adjust our F.I.R.E target every quarter.

That’s all for 2019! Looking forward to even better 2020.