The Horizon's 2018 Financial Year in Review

2018 was quite a year! This year Mrs. Horizon started a new job, we hiked the Smoky Mountain section of the Appalachian Trail, bought a house, checked out the beautiful state of Maine, started the blog, got married, and saw the cool parks in Wyoming! While this year was full of exciting life mile-stones and awesome adventures it was also a successful year on our journey to FIRE! So here we are sitting down to review our financial year so that we can continue doing well in our strong areas and also learn from our weak ones. Here we go!

Economical Adventures

This year we went on 3-week long adventures all across the country! We posted about the cost of our trip to the Great Smoky Mountains National Park which ended up costing us about $750. We tracked the cost of our trip to Wyoming where we saw 4 different and awesome national parks. That trip also was right around the $750 marker. Although we didn’t track the trip expenses for our Maine trip, we estimate that it was around $1000 (the East Coast is expensive!). So, when it is all said and done, we spent around $2500 for all of our big adventures in 2018! We want to continue living life to the fullest even while we are on the journey to FIRE so in 2019 we have three more big trips planned!

Frugal (but Beautiful!) Wedding

As we posted about earlier this year, we got married this summer! It was a beautiful ceremony and a gorgeous reception with all our friends and family present! Although we wanted a nice wedding, we couldn’t imagine spending what the average American wedding costs… $30,000! We found ways to make our wedding more unique, more fun, more relaxed and in the process, much less expensive! Our wedding cost $4700 plus the cost of flowers that Mr. Horizon’s father generously paid for.

Food Expense Flop

Although we certainly don’t spend a ridiculous amount on food, we do spend too much on unhealthy and easy fast food. We have written about this multiple times in our trail logs. Since this amount is completely controlled by ourselves it is low hanging fruit when it comes to saving a bit more money. Initially Mrs. Horizon started tracking our food expenses with the “observer effect” in mind. This effect has been coined by physicists and essentially what it says is that by measuring or observing a phenomenon, it will change the phenomenon. She has seen this to be true in her job when she tells people that she will be monitoring measurements vs when she doesn’t say that she is. So, with this idea in mind she began tracking our food expenses and when the observer effect didn’t deliver a big enough change, we began meal prepping our dinners. This has seemed to be a big driver in eating healthier and hopefully we will see a drop in our food expenses. As a New Year Resolution, we will continue to track our food expenses through 2019 and hopefully we will see some progress!

A Bit of Luck

In October, Mr. Horizon went to the nearby casino (which we wouldn’t recommend on a regular basis). After a couple of hours there he won big. It was very exciting and unreal! This money (minus what is needed for taxes) went straight onto the house. It was a major help to jump start our payments on the house and save us a TON on interest! In 2019 one of our resolutions is not to go back to the casino, simply because we don’t want to give them their money back!

A House to Suit Our Needs

Earlier this year we decided it was time to begin the daunting task of finding a home! We had many ups and downs and we realized that we didn’t know exactly what we were looking for. You can read more about this house buying journey in our trekking guide post, Beating the Banks: Buying a House on Your Own Terms. Once we figured out what we needed from a home it was easier to look at houses more objectively.

In August we purchased our home and started tracking our pay off percentage. The graph shows that we were able to make significant progress early. The payments are close together as we wanted to create a six-month buffer. We were able to take a big chunk out of our loan early on due to good fortune at the casino (not recommended). This helped us jump from 3.3% to 11.8% paid. Starting in November of this year our buffer was created and we will only be paying one payment a month from here on out but on that payment, we will be paying as many extra principal payments as possible.

The graph above shows the total number of principal payments paid on the house we are currently at 90 in just 5 months. We are so excited to continue to track these numbers and will keep everyone updated in our monthly Trail Log.

In 2019 we are planning to try and get to 22.5% paid off which is about payment number 128. We would like to pay off as much as possible but for now this is our realistic goal.

Consistent Saving with FIRE in Mind

Mrs. Horizon and I began tracking our percent to our “Golden Number” and percent of total monthly income saved since April of this year. This is when Mrs. Horizon became more active in our FIRE journey. In the graph below, it is easy to see that our total percent of income saved has really normalized since the purchase of our home in mid-July and after our wedding in mid-August. In the early months April, May, and June we were moving money from other accounts and getting things how we wanted to begin tracking our journey. I had CD’s I needed to close and move into better investments and Mrs. Horizon had to rollover an old 401k. Then we had a dip in savings below 50% because of the wedding and the house closing so close together. For the year we were consistently able to save greater than 50% of our income and are making 55% our benchmark savings for 2019.

The percent to goal grew pretty linearly as our savings normalized between June and September everything was smooth sailing. The last quarter of the year the markets got pretty volatile and it really shows in our graph. We have been swinging wildly even though our savings has remained consistent. Mrs. Horizon and I are looking at this as an opportunity to get things at a 15-20% discount so we look forward to the growth in the future as the result of a very rocky fourth quarter of 2018.

In 2019 we are increasing our IRA contributions up to the new maximum of $6000 annually and will be making a small increase to our brokerage accounts. We decided not to change our 401k accounts at this time as we are nearly maxing them out and we are hoping we can catch that small increase in the next year or two just from raises at work.

Looking Ahead to 2019

We have many goals for 2019! We want to have memorable adventures, get healthier, spend less, save more, and many other goals. One goal that we have is that we would like to share the FIRE ideals with many people in many different walks of life. As we have stated before we have a passion to teach young people about personal finance and wise spending decisions. We are looking for ways to grow young people’s interest in financial literacy.

Here’s to us all hiking our own hike into a great 2019!

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Crossing the Event Horizon