Friday, January 04, 2008

A financial review of the year 2007

Wowee. It seems that lately, my readership has multiplied to staggering new heights. On some days as many as 4 people have visited my blog! Hopefully I'm not getting stage fright. Or starting to censor my more radical opinions subconsciously. I mean, it's a responsible position to have such huge audience, part of which might consist of young, easily influenced minds. So, as a disclaimer, I'd like to underline that I'm not advocating programming, as a hobby or a profession, to just anybody. A wildly exciting thing such as programming also has its downsides and is not suitable, in my opinion, for the faint at heart.

It seems that my recent writings have slipped to some kind of feeble attempts at humour, so today I thought I'd get back to the very essence of this blog: boring musing on strict, hard, insignificant facts. And more specifically, numbers. Because, man, I like numbers. Therefore I keep track of my income and expenses closely and have a jolly good time at the end of each year when I get to summarize my accounting and compare it to the previous year. So here's a short analysis of my financial situation in the year 2007.


My income in the last year consisted, unsurprisingly, mainly of pay from work. The profits of my investment activity (or more accurately, the deposit interest of my bank account) were a mere 0,0003 % of my total net income. That's sad. It means that my income was earned by working hard myself, instead of leeching off on hard work performed by other people, which I think I might be able to enjoy.

All except 0,11 % percent of my income was spent during the year. It might indicate that my budget is too tight. For certain it indicates that I'm not overpaid.

The cost of living

About 45 % of my income was spent on living expenses, i.e. mortgage payments, apartment maintenance charges and electricity. Damn. If living here wasn't so expensive, I might actually have some spare cash sometimes. But let's not forget that the mortgage payments, which were about 32 % of my total income, are a form of investment. Whew. At least some of my money has not disappeared to thin air, down the drain, or become a spare tire around my waist.

Food & household expenses

From 21 % to 25 % of my income last year was spent on food and other household expenses (cleaning products, pharmaceuticals, diapers, furniture and various stuff). I'm not sure of the exact percentage because my accounting system is not precise enough. Of all my expenses, this probably is the one that could be decreased the most. By buying cheaper ingredients and preparing more foods myself I could probably save significant amounts of money. But on the other hand, a family with a small kid doesn't always have the time to cook elaborate meals. By eating frozen pizzas and ready made baby food lot of stress can be avoided. But yeah, I should cut down on the caviar and the condor egg omelettes. Mmm... a couple of those would be tasty right now...

Transportation expenses

Last year, nearly 5 % of my income was spent on car related expenses. That seems kind of expensive, given that I don't really drive that much. But if I would have given in and bought a new, expensive car the percentage would be a lot bigger. There probably is not much to save here: if I didn't own a car, the corresponding sum (or more) would be spent on train, aviation and other public transport tickets by the family. And hey, it's less than in 2006, probably because of cheaper insurance (more bonus).


Then to the fun part. In 2007, I spent less than 2 % of my income on alcoholic beverages and eating at restaurants. That's not much, eh?

My clothing and beauty treatment expenses in 2007 were slightly over 1 %. In the future, it will hopefully be less, because I finally bought a home barber kit. In your face, barber industry, from now on I'm doing it myself!

On music records I spent 0,25 % of my income. That's ridiculously little for a music enthusiast! Hmm. Can I still be called a music enthusiast?

Then some 12 % of my income was spent on miscellaneous expenses, most of which belong to the household category. I see my accounting system (an Excel spreadsheet) has room for improvement.


Once again, 2007 was a financially succesful year, I might say, based on these undeniable facts:
- the family got to live in a house
- nourishment was adequate
- no vital organs had to be sold to fund expenses
- the amount of debt decreased instead of increasing.

In 2008, I hope to achieve the same goals, and additionally I hope to be able to invest more on entertainment. Family entertainment, that is.