It’s Friday 29th December. The last working day of 2023. Katie and I are sat at Bacu, a fancy café in northern Bogota. We have ordered food and then immediately got out our laptops. We are excited! Today is the day when we get to do our financial figures for 2023. We get to see how we did!

We do have a monthly review process so we have a pretty good idea of how we are doing, but we are still dying to know how the year went overall!

The Donegans at their 2023 Annual Finance Meeting

At the end of the year we do our Annual Finance Meeting together where we work out:

  • how much we spent in the year
  • how much we saved and invested in the year and
  • how much our investments increased by!

​It is one of the most exciting meetings of the year. This article will tell you how we run our meetings in the hope that it will inspire you to run your own Annual Finance Meeting and track your numbers! How do you think you did in 2023? Do you even want to know?!

Why track your finances?

What gets measured gets improved. This is a key life principle. If you want things to improve then focus on them and measure them so you know if you are going in the right direction or not!

If you don’t know how much you are spending do you even know if you are spending more than you earn? Is there a gap between your income and spending? If there is no gap and you spend everything you get every month you are heading towards a financial disaster in retirement! The key is to be conscious of your finances, know where the money is going and start investing so you can live comfortably in retirement.

Maybe you’re thinking “There’s no point doing this, I know my money was a mess in 2023″. Even if you feel like 2023 wasn’t a great year for you financially, in fact I would say ESPECIALLY if things didn’t go well money-wise for you in 2023, the Annual Finance Meeting is a must.

Why?!

So you can dig into exactly what you’re going to do differently in 2024. So you can see where your money actually went in 2023. And, most importantly, so that you can have the most epic “before-shot”.

What do I mean by this?

​You’ve seen them… the before and after photos when people lose a tonne of weight. The worse the before-shot the better… poor lighting, push out the belly, poor posture.

This is your chance to take your before shot before you make your epic transformation in 2024.

IMPORTANT: This isn’t an opportunity to beat yourself up. This is so you can learn from what you did and consciously decide how you want your future to be.

Stop burying your head in the sand and take a good look at what happened last year!

If you have just found this article and want to start taking control of your finances then make sure you come along to the free course we do called Rebel Finance School so you can learn how to improve your money and get the epic AFTER shot! Yes it is actually free, with no upsells, sideways sells or anything else. Katie and I do this because we have sorted out our finances and want to help others do the same!

​I can feel you’re itching to start so let’s get into it! How to run your Annual Finance Meeting.

Annual Finance Meeting

The first thing you need to do is figure out your net-worth at the end of the year and second how much you spent in the year.

These are the two most important things to track and Katie “spreadsheet” Donegan has created a couple of convenient tracking spreadsheets for you to do this. Read on to find them!

​We started doing this in 2015. I still can’t believe we have been doing this every month since then and holding Annual Finance Meetings every year for the last 8 years!

Don’t worry if you haven’t done that, most people aren’t like us! The best time to start is now. Download the files that are below (keep reading!) and do your December 2023 figures. If you are feeling frisky you could do all of last year’s figures in retrospect!

DO WHAT YOU CAN and figure it out as you go! We are here to support you!

All you need is a spreadsheet like the one above, an hour or so, maybe a friend, partner, lover to do it with and the biggest and most important thing is to make it……..

Pleasurable

This is one of the things we look forward to most each month and even more so at the end of the year. We love seeing how we have made progress, we chat, and there is NEVER any blame. If it goes wrong we just figure it out together.

We also go out for the most amazing breakfast each time we do it. Great coffee, nice food, lovely location and a good chat. All the ingredients of a nice time and I know deep within my soul that tracking our finances and measuring our progress is what helped us get to financial independence.

Annual review meeting format

Here is a brief run through of what we do at the finance meeting and then keep reading below if you are interested in our figures and what happened to us this year.

This is what we do at our Annual Finance Meeting:

  1. Update your numbers for the last month

Note: If you are new to this, just start with December 2023! Find how to do a monthly finance meeting.

If you have been doing your monthly finance meetings for a while, just update your numbers for the last month.

2024 Net-worth Tracker Template
File Size: 61 kb
File Type: xlsx

net_worth_calculator_2024


This is the latest 2024 net-worth tracker Katie created for you. Instructions how to use it are inside.

“What numbers Alan?!” I hear you shout

The three elements are:
a) Net-worth (how much you have)
b) How much you spent
c) How big is your gap – the difference between your income and spending. Did you make a “profit” personally this year?

Let’s look at each in turn…

a) Net-worth. Click on the file to the right and you will be able to download a funky spreadsheet where you can track your net-worth each and every month and build up a yearly picture. We go through each of our accounts and input the latest numbers. A full guide to measuring your net-worth

b) Spending. We also have a bunch of resources to guide you through how much you spent in the year and to calculate your 2023 wealth-building rate. Remember, if you’re new to this, just start with December 2023. Or if you’re feeling frisky, look at your spending for the whole of 2023 so you can do the full Annual Review Meeting.

You can make this as detailed as you want.
Level 1: work out how much you spent overall, one figure. This is SUPER useful to know and better than 99% of the population who have no idea how much then spent!
Level 2 (you will be extremely tempted to do this after you’ve done level 1): work out how much you spent in different categories
Level 3: ask yourself if you got value from what you bought

Check out this article for detailed help as to how to work out how much you spent in the year.

c) How big is your gap

It’s all about the gap between how much you earned and how much you spent. How big was your gap this year?

Here’s a handy template and video to help you work this out.

How big is your gap calculator


2. How much have the numbers changed?

a) Net-worth. We then look at what our net-worth was at the start of the year and what it was at the end of the year and if there is any difference! We hope that you got to keep some of your hard-earned cash for yourself and got wealthier! Our net-worth went up by 18% this year which is amazing! Got to love investing and market gains.

b) Spending. How much was our overall spending? Was it higher or lower than last year? If you are spending more than you earn you are in trouble.

c) How big is your gap? What was your overall gap for the year (compare how much you earned with what you spent). What did you do with that gap? Was it bigger or smaller than last year? How might you increase your gap next year?

3. Discuss the results. What did you notice? What have you observed? We look at the numbers and this always sparks a lively debate between us. Has our 4% figure gone up? Have we spent more in different categories compared to last year? What was the most fun money spending?

4. Questions – we then ask ourselves a bunch of questions and jot down some answers. We love to learn what was good, what wasn’t and how we can improve for 2024!

  1. How much did we spend? Where did all our money go?
  2. What was a great investment of money?
  3. What was a waste of money? and where could we cut back
  4. Where could we spend more to improve the quality of our lives?

5. CELEBRATE! Even if the stock market hasn’t gone up (it goes down 1 out of every 4 years on average) you have to celebrate that you are doing the work to look after your finances. Celebrate that you are making it happen. Then leave the rest to the power of long term compounding!

6. What do we want to do this year? Then the final part of our annual finance meeting is getting excited about the next year. We talk about what we can earn, we talk about our spending, we talk about using up our tax free allowances. We get excited about building on the achievements of the last year, or fixing it where we made mistakes!

That’s it! Quite simple. Looking at the numbers, tracking it and then taking action to improve it. If you did this every single month as a monthly finance meeting and then an Annual Finance Meeting it keeps you focused on your finances.

And if you are focused on your finances then you will make changes, you will work to improve them. Where focus goes energy flow. Focus consistently on your finances and you will be amazed at what you can achieve over the years!

​Read on for what happened to our finances.

2022 figures

2022 was a rocky year in the stock market. Inflation post covid was raging, Russia invaded the Ukraine and the market didn’t have much confidence in future earnings! As a result it was a ROLLER COASTER of a year.

​This is a chart of our net-worth and what happened to it in 2022

Chart of net worth 2022

As you can see we started the year on £1,748,559 and ended the year on £1,598,330. By anyone’s standards that is not a good year. We were down £148,000 over the year which was all down to our investments.

And look at that rollercoaster. Up and down every month with HUGE swings! if we had been emotional investors, which a lot of people are, we might have pulled our money out of the market and made huge losses.

Did we actually lose £148,000 that year? NO! We had the same number of units of index funds. In fact we actually owned more because we bought more throughout the year.

What am I trying to tell you? Some years it doesn’t go well. This is to be expected! 3 out or 4 years you will be laughing into your pot of gold and market gains. On AVERAGE the stock market increases 12% a year and the price of this is the rollercoaster up and down and that 1 out of every 4 years that hurts.

​If you can put up with that and keep going it is amazing what will happen for you!

Was 2023 any better?

We were excited to see if this year was any better. We knew we were heading to a good year as November has seen a massive market gain. But you never know what is going to happen next in the investing game. Anyone who tells you that they know what is going to happen next is full of shit!

We were super surprised that the market shot up in December and we were at our highest ever net-worth. After a tough 2022 this was a sight for sore eyes!

Net worth 2023

We started the year at 1,598,330 and ended the year on 1,881,525! That is incredible. We had increased our net-worth by £283,000 which is 18%! WOOHOOO!

I ordered another Americano coffee (it was 9,000 Colombian Pesos, about £1.75) to celebrate.

We worked out our 4% figure again to see how much we had to live off each year from now. We chatted about the figures and enjoyed looking at it.

I then asked Katie to create us another chart that we could have a look at. This next chart puts 2022 and 2023 into perspective.

All time net-worth chart

This chart shows the Donegans all time net-worth chart, starting from December 2015. This is total net-worth since we started tracking properly. Most of the early gains were a combination of us increasing our income and AMAZING market gains across those years. I still remember the year that the market went up 30% and I had never felt richer!

If you look to the right of the graph you will see the little wobble that was 2022! When you look at this scale it is a lot less jarring than the 2022 graph above where it looked like we were on a crazy rollercoaster. At this scale 2022 looks like a little blip and then the further out we go timewise the smaller it will seem!

Net worth 2015 to 2023

Why am I telling you this? Because I want you to avoid getting caught up in the monthly highs and lows. We are all in this for the decades and if you look at your investments over decades the monthly fluctuations seem almost irrelevant.

And yes even if you are 60 or 70 you will probably live another couple of decades you are absolutely in this for decades.

Highlights from our discussions afterwards

We had a super chat. I made notes in OneNote and we loved talking about what had happened. Here are some of the key learnings we got this year.

  1. The market tumbled in October and some people in the RFS Facebook group were panicking and thinking of selling. Just breath, relax and if it goes down, buy more units. It always goes up over time and we’re talking about the long-term here. DECADES and more!
  2. What got us here won’t get us there. What got us to financial independence was frugality, saving and putting every penny we could into investments. This behaviour no longer serves us having got to where we are. If we continue to scrimp and save we will die with lots of money. What is the point in that? Got to enjoy some of it along the way. Our original behaviour created this wealth but no longer serves a purpose.This might be a chance for you to ask yourself “What behaviours got me here that I am still holding onto and no longer serve me?” What got you here won’t get you there.
  3. Living in places like Bogota and Poland is excellent value and we LOVE IT. We get to eat in amazing restaurants, live like royalty and not break the annual budget. Travel saves us money.
  4. It felt like we wasted money on some Airbnbs. We paid more trying to get nicer places but sometimes you don’t get more for your money. We need to get better at searching for awesome accommodation we can stay in. This is an area that is both important to us and we can improve in.
  5. The split in our investments is AWESOME for us. Now we have sold our investment properties we have all our money in the market and it is working harder than ever for us which is AMAZING. Our current split is 1.9% cash (emergency fund and operating money) and 98.1% invested in index funds. This would scare more people. But we have been on a journey learning about investments and for us it is super exciting.
  6. 5% not 4%. For the Donegans, being so heavily invested in index funds, we could probably live off 5% of our portfolio a year and never run out of money. We are starting to believe that a 4% spending rate is quite conservative if you have a high percentage in index funds.

Measuring

You can not know if you are heading in the right direction or not unless you measure your spending and how much money you have (your net-worth). We do not want to run out of money in retirement! If we aren’t tracking our spending and investments how do we know if it is going to last?

If you are in the phase of life where you are building up your money and you aren’t tracking, how do you know if you are building wealth or not? How do you know if you will have enough for retirement? How do you even know if you are spending more than you earn?

Use the spreadsheets the amazing Katie “Data” Donegan creates and track your finances. Future you will thank you for it. Current Katie and Alan are SO GRATEFUL for the work that past us did to get us here.

Do something today that future you will be grateful you did.

If you have any questions let us know in the comments.

Sending you huge love.

Katie and Alan

Disclaimer!
We are not financial advisers, nor do we claim to be. This is not financial advise. We are just a couple that has figured out the money game and wants to help you. Make you own decisions! You can read the full disclaimer here.

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2 Comments

  1. Tamarin June 24, 2024 at 8:36 am - Reply

    Kathy, your graph helped to improve mine (not an excel wizard)

  2. Alan Donegan June 25, 2024 at 12:07 am - Reply

    Tamarin, that is so cool! How did you improve it? Yu don’t need to be a wizard to get something out of it! Thank you for commenting. Katie

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