Year-End Reflections: The Finance Edition

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Following up last week’s inaugural Year in Review post around Relationships, today we will be discussing a financial look-back and figuring out where we want to go in 2017.

This is a busy time, but there is a lot of momentum that can be gain with starting fresh in the new year. It could feel like a New Year’s resolution of sorts, but there is a key distinction: you will be equipped to act out of the knowledge of your priorities and concrete goals rather than more generic sentiments like “save more” and “spend less”.

As you know by now, I love the Good $ense Ministry's breakdown of personal finance topics. Feel free to reference the Financial Principle Series: Steward Mindset, Earning, Giving, Saving, and Debt as you go through this exercise!

N.B. I provided high-level comments about each of the sections to give you a flavor around how to answer the questions I posed. However, when I perform this task myself it typically involves my mint account, a notepad, and a calculator (or excel if I'm feel tech savvy) and goes into a lot of detail. This post would have been about 7,000 words had we gone that route!

Point is that a lot of these questions are not intended to be ball-parked. Get into the details, gals, and post questions about how-to's in the comments if you need more guidance. I am more than happy to help!

Steward’s Mindset

As a reminder, one with a Steward’s Mindset understands that God created and owns everything and we are trustees of His provisions. As such, we must use resources wisely.

2016

• How do you feel about how you trusteed your finances this past year?
• Did you see God in how you approached your overall financial plan?
• What is one example of a moment where you stewarded your finances well this year?
• What kind of moments caused your stewarding heart to feel challenged (if any)?

To start off on a candid note, I feel pretty good about my finances this year (Stewardship), but I think there is a heavy dose of grace involved in that assessment. In the fall of 2015, I moved into an apartment that shifted around my financial pie considerably as my rent nearly doubled what it used to be. However, I felt God leading me in that direction and only fought with Him (ha!) for a few months as I tackled and adjusted to my new reality.

A high for me was learning patience around the timing of spending money on things. I knew that I couldn’t be as whimsical with my discretionary finances as I had been in the past because my pie was inherently smaller so I told myself that Europe (visiting my sister) and spending on unnecessary clothes and personal stuff were out until further notice. Now that I am through that phase its cool to see how faithful God was and how amazing I feel for being obedient!

2017

• In what ways / areas can you invite God into your thoughts and actions around personal finances?
• Are there any ungodly beliefs you notice from this year that you would like to adjust in 2017?
• If you could have freedom in one area of your financial life in 2017 what would it be?
• What is one word you’d like to embody in 2017 as it relates to your finances?

I just want more of God in every way. I would say my heart longs for increasing portions of wisdom around finances and a deeper revelation of what Kingdom stewardship looks like as it relates to earning, giving, saving, debt, and consuming.

Earning

As a reminder, a Diligent Earner is one who produces with diligence and purpose and is content and grateful for what he or she has.

2016

• Did you make more money than what you owed?
• Are you purposeful in your approach to earning?
• How does the amount of money you made this year make you feel?
• What was the source of your income?
• What was the time spent that equated to your income?
• Is your income sustainable and steady?
• What is your payment structure? Are you paid by the hour or salary?

Thankfully I am a salaried employee with the Firm so that’s all good. Simliarly, I feel good about the amount of hours I work versus the amount I am paid, and I am conscientious about being thorough during compensation discussions in order to be as knowledgeable about how my performance links to my pay, where I fall versus my peers, etc.

2017

• Do you have a percentage increase or gross dollar amount that you’re aiming to hit in 2017?
• Do you want to make any changes to your income sources? If so, what?
• Do you want to work less hours, work higher paying jobs, etc.?
• How do you feel about the outlook you have on your anticipated earning power and income? 

I am in the development stages for – what I think is – a really exciting venture that would launch in 2017. Stay tuned for more details on that!

Giving

As a reminder, a Generous Giver is one who gives with an obedient will, a joyful attitude, and a compassionate heart.

2016

• How much money did you give this year?
• Where/who did you give it to?
• How and when did you decide where and who to give it to?
• How do you feel about the level of giving you participated in this year?
• Do you feel willful, joyful, and compassionate about your giving (money, time, resources, etc.)?

I had some Giving ungodly beliefs that I needed to work through this year, which forced me to revisit the underlying calculation for my direct deposit. In the process I discovered that the formula I set up back in 2013 and never looked at again (self-admitted #financialcounselingfail) was in fact over-allocating my gift.

If this isn’t an incentive to do a financial check-in, I’m not sure what is! Want to know how to do that? Check out my post on How To Get Financially Fit for Fall.

2017

• How much do you want to give this upcoming year?
• Where/who do you want to give it to?
• In what ways do you want to grow in the areas of giving?
• What changes do you want to make to your giving in light of your experience in 2016 (if any)?

I think my biggest focus at this time of the year – with year-end giving on the brain and all over my inbox – is less about “how much” in terms of myself and more about “how much” with regards to making an impactful contribution to the organizations that I care about.

Is it better to pick a few a make it meaningful or spread it across a bunch? I’m still processing it myself! What do you think?

Saving

As a reminder, a Wise Saver is one who builds, preserves, and invests with discernment.

2016

• What were you trying to save up for this year?
• How much money did you save for those things?
• For the items with deadlines that have passed, did you meet your goal?
• Did you dip into the money set aside for savings for a more immediate need?
• How do you feel about your overall saving behaviors in 2016?

As with everything, money and stewardship are all connected across these individual topics. The freedom I felt in giving this year has also impacted my attitude around saving.  While I had relatively smaller savings goals (think: 401k contributions, emergency funds, IRAs) due to my more limited budget mentioned in the Stewardship section, I was also excited to put money aside for a two-week vacation that I took to Europe and California in September and October after my 2016 compensation went into effect. (See, I told you it was worth the wait! Delayed gratification ftw!)

2017

• What do you want to save for in 2017?
• What multi-year goals do you want to contribute to?
• Do you have a percentage of total income that you like to aim for? If so, how much?
• How confident are you in your ability to save to meet your goals?
• Are you investing? Who helps you make those decisions (if anyone)?
• What are overall long-term and short-term goals and how does your saving fit into the big picture?

Oh man, my heart has really expanded in this area and I pray that it grows in connection to my heart’s capacity to serve and love others well. I have big saving dreams that are multi-decades long (hello, New York real estate!) that I’ve broken down into yearly goals.

I also know that my God knows way more than I do about these things so I want to keep my eyes fixed on Him as I aspire to these goals and make sure I keep myself proportional to Him throughout this journey.

Debt

As a reminder, a Cautious Debtor is one who avoids entering into debt, is careful and strategic when incurring debt, and always repays debt. 

2016

• How much debt do you currently have outstanding?
• What are the sources of that debt?
• How much did you incur in 2016 alone?
• By how much have you reduced your debt in 2016?
• How do you feel about the state of your outstanding debt?

I am incredibly lucky to not be in a position where this is a big deal for me at this point in time. You read about my financial journey with debt a few weeks ago, but at this point in time I am good!

No matter where you are with this, I promise you that understanding what is going on is better than not. I pray that you have grace with yourself and are firm but fair in processing the situation as it currently stands.

2017

• Are you planning on taking on debt in 2017?
• What goals do you have for paying down debt this year (if any)?
• What are your options around reducing debt or not incurring additional debt?
• Do you need to consult an external person for advice around tackling your debt? If so, have you set up an appointment with them yet?
• How do you feel about your plans to tackle your debt in 2017?

I am definitely thinking about what eventual debt (read: mortgage) would look like and trying to stay smart around it. I have no qualms about asking friends about how they bought their residence, financed it, etc. and they have all been super helpful in walking me through it with clear best practices to incorporate and mistakes to avoid.

Whether you’re considering additional debt or not, know what you’re signing up for, how long it’ll take to pay off, and whether the outright cost plus interest is worth whatever you’re buying.

If you’re looking to pay down, that’s amazing. Proud of you, friend!

Consuming

While we won’t get into the full scope on the Prudent Consumer until next month, for the purposes of this conversation I will divulge that the Good $ense Ministry, describes him or her as one who enjoys the fruits of their labor yet guards against materialism. 

2016

• What was the most exciting thing you purchased this year?
• How do you feel about your overall spending happens?
• Where did your money go, percentage-wise?
• What area looks like it gave you the most life and you’re glad, in retrospect, that you did it?
• What area in aggregate does feel as worthwhile after the fact and you might consider altering in 2017? 

I kind of gave it away in the ‘Saving’ section because I saved it to spend it (if that makes sense), but I am a huge fan of experiential consumption and loved my time in Switzerland and California with friends and family.

Also, in addition to being rent high proportional to last year, my pie is very food heavy. It’s a constant struggle for me to be more conscientious about how I spent money on food because my single, consultant lifestyle is so sporadic.

Honestly, I do not feel that the sacrifice of planning ahead, carrying around tupperware, waiting until I get home to eat, food rotting in my fridge because I had a random meeting out of town, etc. are worth the dollars I could save. That is just my reality at this juncture, but I do try to revisit it occasionally to make sure it’s still an accurate reflection of my heart and life because I would love to have more money for fun things like clothes and stuff!

2017

• What are you looking forward to doing and/or buying in 2017?
• If you could adjust your percentage pie of spending to better align with your values, how would it shift?
• For the area that you want to decrease, what does that tangibly look like?
• For the area that you want to increase, what’s your rationale and how do you plan to implement it?
• How do you feel overall about your anticipated spending 2017?

Hmm, I ask these questions and then I stump myself! I’m not sure what I am most looking forward to in 2017. I do feel strongly that I am meant to invest in certain key statement pieces after long stretches of “do not buy anything!” periods and that there will likely be some big expenses coming as things pan out with big changes at work, but I don’t have specific areas in mind. More of a “keep doing what I’m doing” vibe.

Whew! That was a lot.

Are you as exhausted as I am?

My heart is that in addition to feeling challenged that you feel a stronger sense of self and hopeful as you look towards a stronger financial future in 2017!