There are two main factors to building wealth: making more (income) and spending less. There is a debate in the personal finance area of which is more important. To me, making more and spending less are equally important because it’s all about the “Gap” (or Savings Rate) between them.
The bigger the “Gap” between how much you earn and how much you spend, the better (financially) you will be. If you are like me and have debt (specifically Student Loans), it can take away from increasing the “Gap” and ultimately delay financial freedom. Freedom is what makes paying off my debt ASAP important to me.
In 2016, I mainly focused on developing “Minimalistic” habits and spending less. Material “things” have become less important to me, and I have been able to cut out excess “stuff” like clothes, new gadgets, and other consumer items throughout the year.
I understand that spending less is only 50% of the wealth building equation. However, it was an important one for me to start with, because as I increase my income over time, I plan to keep my same habits. Continually spending less ensures I increase the size of the “Gap” in the future.
2016 Income
To paint a better financial picture, I think it’s important to share my income. This year wasn’t my best income year yet; I finished the year with net income (take home after taxes) of $41.5k. I had a higher salary at work than 2015; However, I had less net income mainly because I turned 26 and started paying health care :/ and increased my 401k % at work :).
For 2017, I am going to pursue more “Side Hustles” and find ways to increase my income.
2016 Spending
My very first post on Debt Free Climb was Four Area’s I Saved Money and Doubled My Student Loan Payments. For this recap, I will review the 4 area’s I optimized + Food and Student Loan payment results for the year.
Auto Expenses
In September of 2015, I ended up buying a used car. Buying used turned out to be a great decision so far. With my new (used) car gas fill ups are cheaper, and I have learned to do my car maintenance on my own.
This year I have learned to change my oil, rotate my tires, complete a radiator flush, and replace a bad wheel hub barring (Saved over $500!) all from the direction of YouTube videos.
DIY Youtube Videos used:
Toyota Rav4 Oil Change (pro tip – Walmart has the cheapest Oil and Oil Filters)
Toyota Rav4 Wheel Hub Replacement
To date, I have saved $4207 in Auto costs from 2015. I plan to save even more once my car is paid off in May of next year! Currently, I’m focusing on driving less and utilizing carpooling and public transportation more to reduce costs. A premium bus pass will cost me $62 a month in Austin (I spent $90 on average per month in gas in 2016) so it would make sense to ride the bus more often.

Housing
I have now lived in Austin for 3+ years and now live in my 4th apartment. Earlier this year and previous years I used to live by myself in a one bedroom apartment. In June, I moved to my current place with my GF. I moved in early and paid June rent by myself which drove up this year’s costs, but since July I have been saving ~$300 a month by splitting the rent. Our lease is up in Aug 2017, and I plan to keep my housing costs the same (20% of monthly Salary) or lower.

Gym
I canceled my Lifetime Fitness membership in May of 2016. Cutting my gym membership has saved me over $600 in 2016. I currently exercise for free in my apartment gym. Once my debt is paid off, I plan to get a cheaper gym membership.

Cable/Internet
In July of 2015, I decided to cut the cord and eliminate cable. I have not regretted this decision at all. I ended up buying a digital TV antenna to watch local channels on occasion (Digital Flat TV Antenna on Amazon).
For the internet, I purchased an internet modem and kept my rate at $36 a month for the last year. My internet rate was set to increase in August 2016, so I called, and they let me keep my same rate :). I would suggest calling your local provider to see if they have any ongoing specials to keep your rate/lower it. Since August, I have split the internet costs so now I am paying $18 per month. That’s $392 savings this year. I expect to keep the same internet rate for 2017.

Food & Dining
I include groceries, fast food, and restaurants in one bucket. I’ve been pretty content with my food results so far this year. $1600 savings in 2016.
A couple of ways I decreased food costs:
- I purchased a Costco membership (Split groceries with GF)
- Bring Lunch to work majority of the time
- Coupons
- Never order drinks other than water, keep restaurant outings reasonable
Next year I want to cook more and utilize meal prepping with my Crock Pot.

Student Loans
The main reason I am motivated to keep my spending low is that I can get out of Student Loan debt ASAP. Before 2016 started, I set out a goal for myself to pay off over $18k in Student Loan debt this year. I was happy to see that I covered the goal this year with $18,623 paid (45% of net income and a $2,201 increase from 2015). Ideally, I want to be able to increase my payments to over 50% for the rest of my Student Loan balance and once I destroy my debt, turn that into a 50%+ savings rate going forward.

Overall, I am pleased with the progress I’ve made in 2016. I know that I have room for improvement and plan to optimize my spending as much as possible and improve my 2017 results.
I hope to see you back next year to see how I did in 2017.
Happy New Year!!
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I dumped cable 3 months ago and haven’t looked back! I am considering purchasing a wireless antenna to get news and weather (and watch the Superbowl!). The area I live in seems to have good reception based on the FCC website https://www.fcc.gov/media/engineering/dtvmaps, so I think it should work if I decide to purchase one. Do you like that antenna?
Also, I have no affiliation with Planet Fitness, but if there is one in Austin that’s close, check their website for the $100 annual membership (if you want a cheap gym). They run the promotion randomly throughout the year and there are no extra fees in addition to buying the membership. You can only go to the location you buy it at, but if you plan to use the gym a few times a week it usually comes out to about $1-2 a time for the whole year. Not a bad deal!
Awesome Colleen! I like my antenna, it’s reliable for the local channels (ABC, NBC, Fox, CBS) and has a pretty good picture!
I was thinking about joining Planet Fitness since its so cheap and they have locations nearby in Austin. Thx for the tip!