$1000s in Savings and our 2007 Financial Performance!

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

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Figure 1: Pie Chart showing our expenses and savings for 2007.

There have been a zillion new and unexpected things happening in our lives for the last four weeks. Finally we seem to have stabilized and got around to analyze our personal finances for the year 2007. The overall picture of our household's performance is excellent by God's grace! We had set some goals for 2007 and results show that we have not only met the goals but have surpassed them!!

Figure 1 shows a pie chart displaying expenses and savings of our household's after-tax income. Two large chunks of the pie which are extremely pleasing are a savings of a little over 46% and charity of nearly 17% of our after-tax earnings. Another couple of big chunks which might need some fine tuning this year are rent and travel which consumed around 24% of our budget!

To get a better idea about how we fared in 2007, we compared our data with that of 2006. The results are displayed in Figure 2.

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Figure 2: A comparison of our expenses and savings for 2007 (green color) and 2006 (orange color).

A disciplined approach towards reducing unnecessary expenses coupled with an increase in our income has helped us achieve and surpass our yearly goals for 2007. Some major cut downs were in the categories of rent, utilities, food, cars and education (taking a break from school). We also generated extra income by decluttering our household, selling unwanted goodies online, blogging and collecting sign-up bonuses.

Couple of useful concepts that helped us save money were to purchase used or refurbished products wherever possible and reusing stuff in the household. Cooking from the scratch and bulk grocery purchases from ware houses also helped us pocket several hundreds of dollars this year.

But the biggest help was to pay ourselves first by automatic deduction (from our salaries) for savings and investments. This step helped us to max out our 401(k) and Roth IRA contributions along with reaching monthly goals for our investments (portfolio) for this year. Here are some of the tips which helped us save hundreds of dollars:

Free Money
Online Selling, Shopping, Reuse, Household Savings
Having said that, we notice two areas where we have spent more than we did in 2006. These are entertainment - hobbies and electronic goods in household. We will keep these two areas in our mind while setting this year's goals and pull in the ropes tighter to plug the impulsive purchases and unnecessary expenses.

On reflection, we also note that blogging about our financial progress at FIRE Finance and interacting with our readers and the personal finance bloggers have helped us tremendously in raising our awareness about our financial health. This in turn has aided us to set goals and achieve them in a dedicated manner.

Our heartfelt thanks and gratitude to our audience, pf bloggers and God for helping us succeed with our goals in 2007. Looking forward towards your feedback about how we can improve further. We wish all a wonderful year ahead in 2008!

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