How to Review Your Finances Like a Deranged Management Consultant

Last year, my husband and I started a new financial tradition (okay, maybe it’s fairer to say I strong-armed him into it) in which I tap into the small, shameful part of me that’s still in awe of management consultants despite their well-documented crimes against humanity and I churn out a deck like I’m getting paid $225,000 plus a bonus to do so.

Seriously—I AirPlay a 26-page slideshow to the family room TV. It usually elicits great questions from those in attendance (read: my husband) like, “Wait, do I actually have to pay attention?” and, “Hold on, why are we spending so much money?”

Having been pretty #InTheWeeds with our finances throughout the year as the member of our household who fills out our Wealth Planner every month (and, you know, what I do for a living), I was mildly skeptical that going through the motions of presenting this information to someone else would dredge up any interesting insights. 

But as Nick Saban will remind you…trust the process. 

Here’s the executive summary:

• Our net worth grew by 50%. 

• Our most over-budget category grew nearly 3x this year (as in, we spent roughly three times what we had planned).

• We’re going to be financially independent in three years! Maybe!

The difference a bull market makes

One of the major findings right away came from pulling a slide from last year’s report: In 2022, for every dollar we contributed to our assets, our net worth grew by just 67 cents. This made it feel as though every dollar we dumped into the pile promptly caught fire and lost 33% of its value.

This is, of course, because the whole of our assets were getting incinerated in the worst bear market since 2008, and our new additions weren’t enough to compensate. In 2022, our new contributions made up about a quarter of the total value of our entire net worth. 

Not exactly an encouraging environment for saving, but we stayed the course and pulled through—and this year, we were rewarded. 

In 2023—a year in which the S&P 500 has returned an astonishing 24% (as of this post’s publishing)—our overall assets grew by 51%. This amounted to three times the growth we saw in 2022. 66% of the asset growth was thanks to our contributions, and the other 33% was purely the market going up. 

Seeing back-to-back years with wildly different outcomes is a little disorienting, but a word of feedback to the animal spirits: I much prefer 2023’s vibe, thanks!

Takeaway: Sticking to your investment plan—regardless of whether you’re seeing red or green in the markets—has always* paid off. 

When you tweak your budget to perfection, sometimes your bad behavior just goes underground

Ah, just when you thought the entire reflection was about to be a KGT Victory Lap…think again!

No, when it comes to the things I actually had control over (read: my spending), the grade was decidedly less glowing. We spent a total of $157,190 in 2023. I know! I already know what you’re thinking. What?! $150 big ones? But hear me out. Your honor, in my defense, I was having a good time.

And by having a good time, I mean…

• Moving our entire life 1,000 miles west to California. 

• Paying for multiple surgeries and procedures for a dog with bone cancer.

• Going to see Taylor Swift…and the Taylor Swift movie…and then seeing the movie again…(I better have my own slide on her financial annual review.) 

• Oh, yeah, and buying a Porsche Macan—understandably, the biggest item. 

We also traveled to…

• Vail, Colorado

• Dallas, Texas

• London, England, and Edinburgh, Scotland

• Los Angeles, San Francisco, and Sacramento, California

• New York City (five times for work, though the Brew paid for this—I’m still including for travel street cred)

…and, I’m sure, approximately six other places I can’t remember right now. Point is, we were living, baby!

Despite all the above hoopla, the majority of our spending plans actually went…well, according to plan. As in, we intended to spend that much (okay, not quite that much, but it wasn’t an order of magnitude above our goal). 

It’s funny—as the year progressed and I lived the spending, Travel was the category that I expected would be heinously over-budget. But it was only 8% over. Not bad.

On another note, I’ve mentioned it no less than six times this year, but we were really focused on wrangling our food spending in 2023. And we did! I learned to cook, and our food budget and health are happier for it. We ended up 7% under our planned spend for that category.

Where things really went off the rails was the lawless wasteland of the Miscellaneous budget, which encapsulates our respective “Guilt-Free” categories and Gifts. Turns out, we both need to feel a little more guilt. 

*Insert drop of Thomas going, “Wait, why are we spending so much money?” here.*

This category represented 16% of our total spent for the year—we spent more than double (closer to three times) what we had intended (see also: Taylor Swift, moving cross-country, buying a car, etc.). 

This, of course, presents a pickle for me, because unlike a food or gas budget gone awry, “Guilt-Free Spending” requires a little bit of deeper digging. It’s a category that, when you really get down to it, can only be shrunk by having a little more self-control. To quote that twenty-something in a TikTok I shared recently… “I need to (re)learn how to tell myself ‘no.’”

Takeaway: The best types of budget breakthroughs are the kind that leave you staring at yourself in the mirror, going, “It’s time to find some cheaper hobbies.” 

*Crosses “Porsche collector” off list….for now.*

Now, for some (more) good news: Despite our shortfalls, we still beat our savings contributions goal by 13%

Not because we were miraculously under-budget elsewhere (we weren’t), but because we ended up earning more this year than we had anticipated—and for that, I would like to thank the kind folks with wonderful taste at Penguin Random House. 

Our current net worth could support a retirement lifestyle that costs $72,000 per year. Not bad! (But…well, too bad, because *checks notes* that’s less than half of what we’re spending right now.)

When I revealed this #FunFact to Thomas, he goes, “Wait, you’re telling me we could quit work forever if we just spent less than $72,000 per year? Wow, that’s tempting…” I reminded him that would mean moving somewhere cheaper, traveling a lot less, and living a life without a dog or children, and he reconsidered his enthusiasm.

It does make me chuckle that my financial bad behavior seems to be playing a game of Whack-A-Mole: I manage to cut it out with my food spending, but what do you know? There’s a lot of other fun stuff you can spend money on that you don’t eat. Check and mate, Katie. At least my vices are legal (for now).

Still, the most exciting learning from our breakdown was that we’re expected to become financially independent (should the animal spirits receive and honor my suggestion box entry) in approximately three years, which means—if history repeats itself—I have 36 months to promptly triple our spending again and go, “Oops! Just kidding!” Maybe this is my subconscious sabotaging me because I know my life would be less fun without work. 

Takeaway: There’s more than one way to brush a cat (we don’t condone feline violence on this site, per Sam Cat). 

Looking ahead, we’re *ahem* making some changes

The first major change is I’m going to stop spending my “guilt-free” money like a dinosaur who sees the asteroid in the distance. I will not be buying a luxury vehicle in 2024, and I’m also going to reinstate my old fire-and-brimstone approach to budgeting to get it back on track (e.g., if you’ve already spent your allotted amount, you’re waiting until next month).

The second (and more fun) change is the addition of my “Development” category. I haven’t quite decided on the allotment—partially because I’m hoping some of it can be a business expense— but this will be inclusive of things like an editor/writing coach, potentially an executive or business coach, an online membership to The Class, and other things that’ll #enrich me as a human. Hell, maybe I’ll throw piano lessons or a Spanish tutor in for good measure.

I keep insisting to myself that 2024 is a year of “leveling up,” which means continuing the good habits I began in 2023 and refining them further by investing in my professional and personal growth. Because, as I recently learned, there are two ways to reach a savings goal…and it turns out one is a little more fun than the other.

If you enjoyed this year’s financial reflection, don’t miss last year’s distinctly more emo one about realizing that pursuing financial independence was a sign of a quarter-life crisis (albeit of a more productive variety than the kind that causes you to cheat on your wife and buy a Camaro). 

At the end of that piece, I suggested I was going to try to care less about money and enjoy life more in 2023. Well, Katie, good news: mission accomplished. And for the record, the last-minute T. Swift tickets? Totally worth it. 

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*Past performance is not indicative of future returns, but you knew that already.