wonderfulll

To welcome in the new year, I always take a moment to look back on where I spent my money. I find it very helpful in organizing my spending for the year ahead. In addition, it sometimes gives me a wake up call, as often it is easy to spend a lot in one category without even realizing it (cough, Costco, cough). You can find prior years here: 2014, 2015, 2016.



This pie is for spending only, and does not include savings. Here they are, in order of greatest to least!


Groceries/Dining Out: In 2017, I actually spent 17% less on food than I did in 2016. I had to double and triple check that number though, as I did not feel that it could be correct. However, after checking, I did confirm that I spent about the same amount dining out, but a lot less on groceries. The culprit? Costco! In 2016, I took 5 big Costco trips, whereas in 2017 I only took 3 and man, what a difference a Costco trip makes!!

Misc: This includes personal care, toiletries, gifts and donations, credit card fees and things like that. This year my dollar amount increased significantly! The bulk of it is gifts, but I had some registration/education fees to pay this year which really upped the dollar amount of this category a lot.

Health: This includes pre-tax deductions and any copay or charge for the gym, prescriptions, contact lenses etc. The bulk of this percentage is health insurance.

Shopping:  This category pretty much includes anything I buy on Amazon, regardless of the use. I am too lazy to sort through the purchases to see what is food related or what is not. In fact, that could be a big reason why my food spending was so much "less" in 2017, as I do buy a lot of dry goods on Amazon. In addition, much of it could probably also go towards the Entertainment or the Travel categories as well, as I did buy some camping/hiking related items as well.

Entertainment: This includes movies, baseball games, and running related (or other hobbies) expenses. This year, most of it went to race fees. I did travel for running, but I kept that in the travel category.   

The Verdict: In 2017, as planned, I did spend less dollars than last year. However, it's a bit of a cheat, as I bought a car last year. Without the car purchase, I would have spent about 9% more in 2017 than I did in 2016. I did see big increases in Health (I blame premiums), Misc (education) and Shopping (laziness of not sorting the category, aka human error). I spent a lot less on Groceries (sorting/human error/Costco) and Transportation (car purchase) and pretty much the exact same amount on Dining Out and Home.

What should I do differently? I would say that aside from spending less on shopping, I should probably get a better categorization system for Amazon purchases. Otherwise, I could travel less. NOT! Actually, most of my travel involved camping, so the bulk of the cost was flights and transportation costs.

Do you tally up your spending at the end of the year? Do you budget for next year? What was your highest spending category in 2017?

Happy New Year!! It's that time of year again...money pie time!! As you know, each year I recap my spending throughout the year as a percentage. I think this is a great way to see where the money is all going so that I can make smarter decisions with my money in the future years. You can find previous year's posts here: 2014, 2015.



Groceries/Dining Out: Once again, these are almost the same! This year some friends and I went out to a nice meal once a month and we took turns paying. This equates to about once every four months me spending way too much on dinner. However, it is a lot of fun, but it's not helping my "dining out" budget.

Misc: This includes personal care, toiletries, gifts and donations, credit card fees and things like that. The bulk of it is gifts. The other things are minor.

Health: This includes pre-tax deductions and any copay or charge for contact lenses etc.

Entertainment: This includes movies, baseball games, and running related (or other hobbies) expenses. This year, most of it went to race fees. I probably should shift some of my "travel" over to this category, but once again, I am too lazy to really sort it out that thoroughly.

Shopping:  This category included clothing, toiletries and items from Target that were not home or running related. This year I bought a couple of pairs of work shoes and some things from REI which could be in the entertainment category...and that is pretty much it.

So, what did I learn from this? This year I definitely spent more that last year, although a lot of that extra cost was due to my purchase of a car. However, excluding the transportation category, the biggest increases over last year belonged to the Entertainment (53%), Health (33%) and Home (26%) categories. This makes sense, as I signed up for more big ticket races, my insurance premium went up, and I was in my house for a whole year vs. 7 months last year. On the flip side, I also saved more this year, so I am pretty happy with that, as my goal from the beginning of this year was to save more if I could.

What do I want to accomplish this year? This year I hope to do a bit of deeper analysis and develop a plan regarding getting the best bang for my buck. For example, does it make more financial sense to put my money into savings or use it to pay off my mortgage quicker. I have most of the information I need; now it is time to execute! In addition, once again I would like to save more this year than I saved last year. I would like to say I could minimize the Home category, but in reality, there is always a backyard project or a broken pipe or a random thing that goes bump in the night. So, that's it!

Do you keep track of your spending habits? What is the biggest piece of your money pie? What are your financial goals this year?

Last year was very hectic for me. The reason for this is that in addition to working and running a few races, I was in the market for a home. There are a lot of moving pieces involved when buying a home, especially when you live in the San Francisco Bay Area, which is one of the hottest places to live (and the most expensive) in the country.

I thought I would break down my search into a few posts, starting with the beginning, which was financing. Oh the joys of getting a loan. Now, I have no idea what the right or wrong way to go about this is, but I will talk about the way that I did it, and what seemed to work for me.

First, I pulled my credit report. I have heard, and I am not sure if this is true, that it is better to pull it 6 times in one month than 6 times over the course of a year. So I pulled it, knowing that the lenders would also pull it. Luckily, it was in good shape.

The next thing I wanted was a pre-approval letter. I had no idea what I was getting myself in for, but I did know that a pre-approval letter was better than a pre-qualify. With a pre-approval, the lender gets mostly all of your paperwork and then they use that to figure out how much they will be willing to lend you. This is important for a couple of reasons. Firstly, it is hard to figure out how much you can afford. I spent a lot of time on the internet plugging in numbers, but until the lender actually used my actual hard data to get an amount, I was just guessing (with the help of Google).

The second reason that it's important is that it helps to submit the pre-approval letter with your offer. This can help convince the seller that you are serious about the offer, and it will make them more comfortable that your agreement is not going to fall through due to lack of financing. In the Bay Area, your offer will most likely not get accepted without a pre-approval letter.

To get a pre-approval letter, you have to figure out who you want to try to get a letter and/or a loan from. How do you figure this out? Good question! Once again, I turned to Google (and Zillow) to find out who could give me the best rate. In addition, I asked several people who they had used and how their experience had been. I got a lot of different answers. Zillow named two internet banks and Bank of America as having the best rates. Two of my friends used Quicken (internet bank) and Bank of America.

So, I contacted one internet bank, Bank of America (who happens to be where I have had my accounts since I was a teenager) and Citibank. What happened next was this:

The internet bank asked me to fill out a form with my financial info and send it back to them. The lady was very nice and the operation seemed legitimate. I filled out the form and sent it back and got a pre-approval letter the next day.

Bank of America connected me to Texas. I finally got routed to a local agent, who barely spoke English (sorry!) and tried to talk me into getting a 5/1 arm (adjustable rate) instead of the 30 year fixed that I asked her for. She then asked me to send in about 400 different kinds of paperwork, including all of my Bank of America  bank statements. I sent them all to her and did not hear back from her for three weeks (when I called her, her message said she was on vacation).

Citibank sent me an unprofessional email with no signature or logo that looked like a 12 year old had sent it, asking for 400 different kinds of paperwork. I told them I would feel more comfortable seeing a real person and giving my documents to them and the guy blew me off.

Since the Citibank guy seemed unprofessional, I contacted a third option, a local broker, and I sent him all my 400 different kinds of paperwork. He was very helpful and even helped me run a few different scenarios, depending on my down payment and/or desired purchase price. The guy was easy to reach on the phone and answered any (dumb) questions I had throughout the entire process.

The verdict: The amount I could qualify for was less than I wanted, since they could not count bonuses or overtime unless you could show two full years and proof that it would be ongoing. Bummer. So that meant the amount I thought I could spend was not the actual amount... in addition, I found it very strange that they ask you how much you want to spend. Can't they just crunch all the numbers and then tell you what the absolute max is?

My advice: Try a bunch of different lenders. You have no commitment to them. Once you have all of your 400 documents in pdf form, you may as well send them to as many lenders as you can!

In addition, my realtor told me a few tips. (1) the big banks (BofA etc) take forever to get you an answer, sometimes meaning you lose the house because you can't get financing in time. I know this as well because I work for a big bank and I see some of the frustration over how long thing take. (2) The internet banks will give anybody a pre-approval letter and will often give you the number YOU want, rather than what you can really afford. This causes problems later when it comes to getting the actual loan. Due to this, often times sellers will not accept offers if the letter is from an internet bank.

So, there we have it, my new understanding of financing in a nutshell.

Have you gotten a home loan? What advice or tips do you have for others regarding the situation? 

*Disclaimer: I am not a professional. Any opinions I give are my own and you should do your own research before making any rash decisions. :)